High rubber prices salve tax headache

via CAAI

Tuesday, 11 January 2011 15:00 Chun Sophal

HIGH international rubber prices are making a recent tax rise on exports more palatable, according to some of the Kingdom’s leading figures in rubber production.

Increasing rubber prices are generating high profits for the industry, with quality exports fetching near US$5,000 per tonne on international markets, according to Mong Reththy, who is a prominent businessman and co-president of the government-private sector working group on agriculture.

Last month, Prime Minister Hun Sen signed into law an increased tax on rubber.

If the product is worth below $2,000 a tonne, a tax of $50 per tonne will be charged.

While if the product is worth above $4,000, the tax will be $300 per tonne, according to article three of a subdecree which went into effect on January 1.

For exports worth between $2,000 and $4,000 a tonnes, the tax ranges from $50 to $200.

The tax had previously sat at $50 per tonne, regardless as to the value of rubber.

“I think rubber exporters will have no objection to paying taxes in line with special taxes imposed by the government,” said Mong Reththy yesterday

Rubber producers interviews by The Post raised few concerns about the increase in levies.

Men Sopheak, deputy director of Sopheak Nika Investment, said the government’s decision to raise the tax was acceptable, given the commodity’s rise in value on international markets in recent months.

Sopheak Nika exports some 10,000 tonnes of rubber each year.

While Leng Rithy, president of the Vietnam Rubber Enterprise Federation, said the company – which has been granted land concessions totaling 100,000 hectares – was still studying Cambodia’s decision to increase the export duties.

“The company hasn’t yet produced rubber for export, so we need time to study the decision in advance,” he stated.

Cambodia exported some 35,000 tones to 40,000 tonnes of rubber per year over the last five years, according to data obtained from the Cambodian Ministry of Agriculture, Forestry, and Fisheries.